Nickel, belonging to iron group, is a silvery white metal known for its hard and ductile properties. Mainly used as an alloy in steel, demand and supply of Nickel is closely linked with the fortunes of stainless steel. Manufacture of stainless steel accounts for 65 percent of global nickel output while 20 percent goes in other steel and non-ferrous sectors.

Global Situation

Nickel is a highly volatile traded commodity due to its importance as a critical input in stainless steel manufacture. Rising demand and limited supply is the major feature of global nickel industry at present. Russia tops in global nickel output followed by Australia, Canada and New Zealand. China, US and European Union are the main consumers of nickel.

Nickel prices rose to a whopping 150 percent to $34,750 per 1 ton in August 2006 from $13,500 in January 2006. The average prices stayed around $20,300 per ton during 2006, higher by 38 percent compared with 2005. Record output in stainless steel coupled with supply disruptions in nickel catapulted the rise during the year. Nickel is expected to stay firm in 2007 due to expectations of demand outstripping supply.

Global consumption of nickel is expected to rise 7 percent to 1.34 million ton in 2006. This may further go up to 1.38 million in 2007. Global production is estimated to be 1.32 million ton in 2006 and is likely to reach 1.37 million in 2007.